PwC, one of the Big Four auditors, has undertaken its first stock count audit using a drone.
In a global first for the company, the drone captured more than 300 images of a coal reserve, which covers a total area of approximately 200 hectares, at one of the UK’s last remaining coal-fired power stations in South Wales.
The trial was part of a wider drive to harness emerging technologies to enhance audit quality and efficiency and transform the audit process. Hemione Hudson, head of assurance at PwC, commented:
“Technology is an enabler for positive change and this drone-assisted stock count is an illustration of how we are using technology to enhance audit quality and efficiency. It’s just one example of the benefits that come from bringing our technologists from across PwC together with our auditors.”
According to the firm, the drone, manufactured and operated by UK drone company QuestUAV, reduced the audit time by 85%. The traditional method of manually traversing the coal pile can take around 4 hours, whereas using a drone it can be done in half an hour.
The images from the drone were used to create a point cloud [a set of data points in space] ‘digital twin’ [a virtual model of a process, product or service] of the coal pile in order to measure its volume. The value of the coal was then calculated to within 99% accuracy.
The drone captured c.900 data points per cubic metre, obtaining overall accuracy levels of 2cm. This is compared to c.1,200 readings taken across the whole site using the traditional method of GPS tracking poles to measure. The drone enhances accuracy by providing a true, continuous representation of the coal pile.
The digital twin can also be viewed via PwC’s Geospatial app, a visualisation tool which helps the PwC audit team interrogate data about the inventory on site, providing valuable insights on the health and maintenance of the wider power station assets.
Coal piles can be unstable so using a drone poses less of a health and safety risk, as only a limited area of the coal pile is needed for flight preparation. The drone is also less disruptive as it doesn’t have to interrupt normal operations at the station.
Elaine Whyte, UK drones leader at PwC, believes the trial, “demonstrates the powerful new perspective that we believe drones can offer for businesses across a wide variety of industries. Sectors with large assets in hard to reach areas are the most obvious starting points for expanding this kind of work further – from mining to agriculture and forestry.
“Our recent economic report showed that drones have the potential to not only improve UK productivity, but also offer significant net cost savings for businesses to the tune of £16bn by 2030.”
Richard French, audit partner at PwC, added: “While the traditional method remains reliable and will still be used for RWE’s formal year-end financial statements, the drone trial was conducted to explore ways of challenging the traditional method of stock counting. It was a classic example of new technology challenging the old – and based on our results, the potential is ground-breaking.”